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General Accounting Discussions: prepaid inventory & cos

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    If you purchase prepaid inventory with intent to use in a SW product,
    then you do not end up using it, do you have to write it off to COS or
    can you write it off to departmental expense for those who purchased it?
    • CommentAuthorneo
    • CommentTimeAug 31st 2007
     
    A usual prepaid inventory transaction entry is usually like this:

    Dr. Prepaid Inventory (or just Inventory <asset method>)
    Cr. Cash/Cash in Bank

    So, there's no need to "write if off" elsewhere...

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